ABOUT THE COMPANY
Rail Vikas Nigam Limited a public sector undertaking under the Ministry of Railway responsible for the development and implementation of railway infrastructure projects in India. Company has given a jaw dropping returns of 180% during the past three years. Securing order worth 1,000 crores in Q1FY26 the total order book stands at 1,00,000 crores. The stock is overvalued with P/E Ratio of 58x compared to the industry median of 38-47x. FII’s had increased their holdings in the company from 0.55% in March 2020 to 4.89% in June 2025, indicating investor’s confidence in the company.
Analysis of the Financial Statements
Revenue Growth Trend
Revenue moved from 14,531 crores in 2020 to 19,923 crores in 2025 with a 6-year CAGR for revenues stands at 6.52%, while its competing company Ircon International Limited has a 6-year CAGR of 14.82%. CAGR rate can be a red flag for the retail investors, but they should make their decision keeping in view the expanding order book and FII’s increasing stakes in the company.
| MARCH 2020 | MARCH 2021 | MARCH 2022 | MARCH 2023 | MARCH 2024 | MARCH 2025 |
| 14,531 CRORES | 15,404 CRORES | 19,382 CRORES | 20,282 CRORES | 21,879 CRORES | 19,923 CRORES |
Profitability & Margin Analysis
Operating profits of the company have been constant at 6% in the past 5 years while the industry average being 8-9%. This indicates higher operational costs of the company when compared to its competitors. If management focuses on cost efficiency and faster execution, margins could improve closer to industry averages.
| MARCH 2020 | MARCH 2021 | MARCH 2022 | MARCH 2023 | MARCH 2024 | MARCH 2025 |
| 5% | 6% | 6% | 6% | 6% | 6% |
Balance Sheet Strength
The total assets of the company have grown from 12,395 crores in March 2020 to 20,482 crores in March 2025 showing subsequent capital investment. This subsequent growth shows company ability to support expanded operations. This asset appreciation plus cutting operational costs can build a solid foundation for future earnings growth, provided execution stays on track.
Debt Profile
Borrowings of the company increased from 4,257 crores in 2020 to 5,419 crores in 2025 showing a low increase in respect to the total assets of the company. Debt to equity ratio hovers 0.56 (FY24-25). While the interest coverage ratio of the company is 11.8, which indicates that the company can easily meet its future interest liability. Reserves showed a sharp increase, indicating a large portion of the assets are financed through retained earnings and not through debt. This makes the balance sheet healthier than if it was purely debt-driven.
Cash Flow Health
Operating cash flow of the company has not been consistent for the past few years, indicating company is not able to convert its profit into cash on a consistent basis. Cash Conversion Cycle of the company has gone from 21 days to 27 days showing an inefficient cash collection system by the company, but being a PSU this cash conversion cycle can be considered to a limited extent.
Analysis of the Company Management (Concall/Disclosures-based view)
Recent conference calls highlighted:
- Management is focused on keeping the operating cash flow positive and expected to track execution.
- Company is heading toward technology-led opportunities with long-term value.
Disclaimer: The article is for informational purposes only and not investment advice.